Adidas Wins Appeal Over Kanye West Yeezy Deal Dispute

A San Francisco appeals court ruled Adidas did not mislead investors about Kanye West's conduct, preserving the Yeezy partnership after a 2023 shares slump and inventory challenges.

Adidas has prevailed in a shareholder lawsuit that accused the company of hiding concerns about Kanye West, now known as Ye, before their high-profile collaboration ended in 2022. A federal appeals court in San Francisco ruled that Adidas did not mislead investors about the risks of partnering with a celebrity.

The Yeezy partnership was a major driver of Adidas revenue, but the alliance collapsed after West made antisemitic remarks, triggering a stock drop and the decision to sever the deal. Investors argued the company should have disclosed the risk in its public documents, but the court found no evidence of misleading conduct.

What happened and why it matters

West’s actions prompted several partners to cut ties, and Adidas faced a heavy inventory challenge with Yeezy sneakers stored in warehouses while its market value fell in 2023.

In court filings, lawyers for investors claimed Adidas continued the partnership despite knowledge of West's controversial conduct, but the appeals panel ruled that celebrity endorsements inherently carry risks that reasonable investors understand.

The ruling and financial impact

The 9th U.S. Circuit Court of Appeals upheld the district court's dismissal of the case, cementing Adidas' position after a significant stock decline in 2023.

Yeezy sneakers, a luxury line designed by West, generated about £1.3 billion in sales in 2021. Following the split, Adidas reported just over £0.85 billion worth of Yeezy stock in storage, and in 2023 announced plans to sell it with some proceeds donated to charities working to counter hate.

West is not a defendant in the suit, and Adidas declined to comment on the decision.

Expert comment: Securities law specialists note the ruling underscores the risk profile of high‑profile partnerships. They emphasize the importance of transparent disclosure to investors.

Short summary

In brief, a San Francisco appeals court ruled Adidas did not mislead shareholders about the Kanye West partnership. The decision preserves Adidas’ position after 2023 stock declines tied to the split, while the Yeezy inventory remains in liquidation plans. The case highlights how celebrity endorsements can carry inherent risks that investors should evaluate.